Tensions have risen between the Nigerian National Petroleum Company Limited (NNPC) and fuel marketers, represented by the Independent Petroleum Marketers Association of Nigeria, due to the ongoing debate on the removal of subsidy on petrol. The clash is heightened due to the depreciation of the naira as against the US dollar in both official and parallel markets.
On Tuesday, the official market saw the local currency close at 998/dollar, while the black market recorded a trading rate of 1,225/dollar. Economists and oil marketers suggest that the subsidy on Premium Motor Spirit (PMS) is increasing due to the falling naira rate. However, NNPC contends that it is recovering its full importation cost for petrol, countering opposing views.
Despite NNPC’s stance, oil marketers argue that the subsidy on petrol is on the rise, particularly considering the naira’s depreciation and the cost of crude oil. They propose a free market price of N1,200/litre for PMS. Currently, petrol, solely imported by NNPC, sells between N617/litre to N660/litre, depending on the location of purchase in Nigeria.
Source: Punch Newspaper